Public Power - June 2008 - (Page 73)

Seattle’s City Council enacted a policy requiring the utility to meet certain debt/equity ratio targets to set up monetary reserves and to be sure that revenues would be adequate to cover its operating costs each year. “As a result of the crisis, City Light had substantial unplanned energy costs that had to be paid for, and it was not prepared to deal with anything of this magnitude,” said Carrasco. “It ended up having to borrow money to pay for $600 million in unplanned energy costs.” The crisis also led to four rate increases, equaling a 58% increase. This caused substantial problems for the utility and ultimately led to the former superintendent not being reconfirmed. The board issued its first report in early 2004, just as Carrasco joined the utility. It submitted another report in 2005 and its final report in 2006. When the terms of the board members expired in 2006, the mayor and City Council realized the advisory group was still valuable. As a result, the council passed legislation to continue the group as a committee. Members of the newly formed Seattle City Light Advisory Committee were selected and seated in late 2007. “As a committee, we are set up to work on topics that the mayor and City Council want us to address,“ said Arnold. Financial health, reliability and distribution, resource acquisition and risk management, and human resources are issues addressed by the committee. Three committee members are selected by the City Council and three by the mayor, with all nominations confirmed by the council. www.APPAnet.org Members must possess expertise in business, finance, energy conservation, environmental protection, energy law, utility operations, and power and risk management. “All members have either significant utility experience and/or significant business experience that allow them to bring financial, operational, engineering, strategic planning, labor, and other backgrounds to the board,” Carrasco said. Financial health: “We selected financial health, because two of our members had been on the previous advisory board, and, as noted, the board had devoted a lot of time to financial issues in 2003 due to the energy crisis,” said Arnold. “We think that this has helped to come a long way toward recovery. In fact, the rating agencies have upgraded the utility’s bonds.” The committee was also concerned about the rate-setting process. Under Washington state law, the utility executive proposes the annual budget, which is approved by the City Council near the end of the year. However, rates are set earlier in the year. “Several of us on the committee come from the IOU world, where rates are set by the state commission,” said Arnold. In a January 2008 report, the committee recommended that a mechanism be created for marrying the two processes at City Light. Reliability and distribution: “City Light’s infrastructure is outdated and potentially dangerous. Utility customers want safe and reliable delivery of electric power at reasonable cost. A system whose maintenance policy is ‘run to failure’ cannot satisfy these goals. A major upgrade is urgent. The RELIABILITY! Gambling with the reliability of equipment can be very risky business. Weidmann Diagnostic Solutions provides the vital knowledge you need to help you lower risk and improve your system’s reliability. AcuTestTM Services - Comprehensive range of insulating oil and gas Analytical Testing for Substation Equipment. Qualified testing facilities are conveniently located throughout North America and around the world. TekNosticsTM – Weidmann proprietary diagnostics incorporated in products and services for monitoring the Condition Status of your substation apparatus. On-line monitoring of main tank and LTC insulating oil. InfoPortalTM Services - For on-line data management, custom diagnostics, detailed condition status and comparison reports with Alert and Alarm notification for problem Units. InfoPortalTM Knows Your Transformers. EduTrainTM Services – Knowledge transfer focused on general T&D topics along with detailed face-to-face training sessions or webinar events for specialized areas. Topics include testing, diagnostics and condition assessment techniques for substation equipment. Let us EduTrainTM your team! Weidmann Diagnostic Solutions 800-811-2284 - 916-455-2284 email: diagnostics.wds@wicor.com www.weidmann-diagnostics.com JUNE 2008 73 DON’T MISS IT! 7 ANNUAL TECHNICAL CONFERENCE th September 15-17, 2008 New Orleans, LA Don’t Gamble with NEW DIAGNOSTIC CONCEPTS FOR BETTER ASSET MANAGEMENT http://www.weidmann-diagnostics.com http://www.APPAnet.org

Table of Contents Feed for the Digital Edition of Public Power - June 2008

Public Power - June 2008 Contents Perspective 10 Questions Finding Common Ground on Climate Change Solutions A Patchwork Approach to Renewable Energy Whose Grid Is It Anyway? The Little Utility That Could Benchmarking Customer Service Can Prairie Hay Power Your Town? Storming the Control Room Investing in the Smart Grid Coming of Age: Superconducting Cables Community Broadband Economic Development Customer Service Human Resources For Governing Boards Safety Parting Shot

Public Power - June 2008

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